Just finished the 2004 calculations, and aside from some out-of-balance sectors that are due for rebalance in the first quarter, my portfolio looked like the below this year. Actual performance was a little over 14% in 2004, after paying fees of about 0.4%.
It consisted of: (sorry about the alignment, can't seem to get columns to work right)
US Large Value Tilt 12.0%
US Small Value Tilt 8.0%
Int'l Small 9.0%
Emerging Mkt 6.0%
Int'l Large 5.0%
US Government Bonds (tips,Ibonds) 4.0%
ST Corp /Money Mkt 4.0%
Med Term Int'l Bonds 12.0%
Med Term US Bonds 10.0%
GNMA Bonds 5.0%
High Yield Bonds 5.0%
Oil and Gas 3.0%
Market Neutral Hedge Fund 3.0%
Commodities 4.0%
Commercial Real Estate 5.0%
Private Equity/ Venture Capital 5.0%
100.0%
In rough terms, that is 40% equity, 40% F.I and 20% other (the last 5 categories)
While this is gratifying, does anyone else have the same feeling as I that a couple good years (2003 was also good) will just need to be paid for with under-average years in the future? The 20 year historical averages for this portfolio (longest data series available for several of the asset classes) is 9.1%
Its one of the psychological burdens of this asset allocation with annual rebalancing approach... bad years obviously never feel very good, and then good years just feel like you'll need to pay later. best I can hope for is these good years were already paid for in 2000-2002, but I kinda doubt it!
It consisted of: (sorry about the alignment, can't seem to get columns to work right)
US Large Value Tilt 12.0%
US Small Value Tilt 8.0%
Int'l Small 9.0%
Emerging Mkt 6.0%
Int'l Large 5.0%
US Government Bonds (tips,Ibonds) 4.0%
ST Corp /Money Mkt 4.0%
Med Term Int'l Bonds 12.0%
Med Term US Bonds 10.0%
GNMA Bonds 5.0%
High Yield Bonds 5.0%
Oil and Gas 3.0%
Market Neutral Hedge Fund 3.0%
Commodities 4.0%
Commercial Real Estate 5.0%
Private Equity/ Venture Capital 5.0%
100.0%
In rough terms, that is 40% equity, 40% F.I and 20% other (the last 5 categories)
While this is gratifying, does anyone else have the same feeling as I that a couple good years (2003 was also good) will just need to be paid for with under-average years in the future? The 20 year historical averages for this portfolio (longest data series available for several of the asset classes) is 9.1%
Its one of the psychological burdens of this asset allocation with annual rebalancing approach... bad years obviously never feel very good, and then good years just feel like you'll need to pay later. best I can hope for is these good years were already paid for in 2000-2002, but I kinda doubt it!